The market is always in a constant cycle of life and death. To accurately grasp the market, it is necessary to look at it from a larger perspective, understanding what the daily chart is doing and how the 4-hour chart is moving. With a grasp of the direction at a larger scale, one can stabilize their emotions in the fluctuations at a smaller scale, and not be disturbed by emotional fluctuations. This is also why it is necessary to start analyzing the market from a larger scale and gradually move down to smaller scales.
In this round of the small bull market, there is still a possibility of further extension, but when a large-scale selling point structure appears, reducing positions is the main approach. Let's continue to look at the market.
Daily Chart:
The divergence within the line segment of the daily chart is basically established, and the market is entering a rhythm of downward retracement. Market reversals generally do not come as strong as a storm. Even if (possibly) a small bear market is initiated, it will not fall so quickly. Large-scale reversals usually involve at least a few weeks of volatile market conditions. Therefore, even when operating at a large scale, it is best to use the 4-hour chart as the operating level.
4-hour Chart:
The downward retracement on the 4-hour chart is quite obvious at the moment, so this retracement is at least at the 4-hour level. Even so, it is still not advisable to chase short positions at the moment. Large-scale short positions should be set up on the 4-hour chart. Even if shorting at the moment, it should be at a small scale (such as setting up a short position on the 1-hour chart and exiting after the end of the downward segment on the 4-hour chart).
1-hour Chart:
The downward momentum is strong, and the current position is not suitable for chasing short positions. It is necessary to wait for a complete structure to appear before finding an entry position.
Simple terminology explanation:
Level: A unique concept in the Chan theory, representing the market in two dimensions of time and space. The larger the level, the longer the time and the greater the fluctuation space, generally including 4-hour level, 1-hour level, 30-minute level, etc.
Trend type: Divided into consolidation and trend, with rising and falling trends; each level has corresponding trend types.
Line segment: The composition of the trend type at a subordinate level, "a segment of a certain level" specifically refers to a line segment.
Divergence: Refers to the end of an upward or downward trend, where the price reaches a new high/low, but the momentum clearly weakens. Usually judged with the assistance of MACD.
The views in the article are for learning and reference only and do not constitute investment advice.
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